Not upheld: section 75 claim for misrepresentation and section 140A claim for unfair credit relationship complaint against Clydesdale Financial Services Limited, trading as Barclays Partner Finance (BPF)

Decision detail

Summary

Mr F purchased a Fractional Club timeshare membership in January 2012 for £16,699 financed by BPF. In June 2021, over nine years later, Mr F's professional representative submitted a section 75 claim alleging misrepresentation and a section 140A claim alleging an unfair credit relationship, citing high-pressure sales tactics, misrepresentations about investment potential and resort exclusivity, and undisclosed commission. BPF rejected both claims. The ombudsman found the misrepresentation allegations were bare allegations lacking supporting evidence and were time-barred under the Limitation Act 1980. For the section 140A claim, the ombudsman applied the Supreme Court's Hopcraft, Johnson and Wrench judgment and found that even if the Supplier breached the Timeshare Regulations, the low commission level (3.98% of charge for credit), lack of evidence of concealment, and Mr F's subsequent actions (upgrading the membership, relinquishing it in 2016, and not mentioning investment in his 2017 complaint) demonstrated the credit relationship was not unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the PR's allegations of misrepresentation were bare allegations unsupported by first-hand testimony or evidence. Regarding section 140A, the ombudsman applied the principles from Hopcraft, Johnson and Wrench, finding that even if the Supplier breached Regulation 14(3) by marketing the membership as an investment, this did not automatically render the credit relationship unfair. The commission was low (3.98% of charge for credit, compared to 55% in the Johnson case), there was no evidence of a concealed commercial tie, and Mr F's later actions (upgrading the membership, not mentioning the investment element in his 2017 complaint) suggested the prospect of financial gain was not a motivating factor in his purchase decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website